Strange Money and Old Economies

Bored with coins? Here’s a dose of economics to help your fantasy campaign.

Fantasy Commerce

Commerce is an influential factor in game play, even within the psuedo-mediaeval economies of fantasy game camapaigns. While this statement sounds overly simple, it is worth mention, as the financial details of any milieu can be overlooked easily. After all, not all players are (nor are they expected to be) economists, bankers, forecasters, etc. But the ways and means of commercial activity within the campaign is of significant importance, and it is more than likely that the characters, as they adventure, will significantly impact the economies of the civilisations they visit.

After little thought, this concept becomes obvious. Adventurers choose their lot for many reasons, but a frequent motivation is financial gain. What adventurer would not beard a dragon in its lair for a huge pile of gold? What rogue doesn’t salivate over the prospect of fattening his purse with a few midnight forays into the merchant district? What warrior balks at rescuing the princess for the rich reward promised by the king?

Some, to be true, but not all, it is certain. As a result, such adventurers return from their exploits laden with gold and gems and valuables, using them to buy the strongest equipment, the sharpest blades, the fastest mounts, and the finest rooms in the inns along their path. “Buy” is an integral word in the previous statement, for, if the characters have access to goods and services through their coin, then the campaign is assumed to sustain not only some medium of economic exchange but also the economies required to support such commerce.

So when Wereguard the Warrior returns to town after earning the king’s reward, he will, through the process of buying goods, inject his new-found wealth into the economy of that locale. As more money is returned to the mercantile and service guilds of the town, the less overall value Wereguard’s coin represents. This is not to say that a gold coin here and there or a handful of silver to a passing beggar will tip the town’s financial scales and drive the economy into inflation. However, a half-score of Wereguards, each laden with a king’s ransom, within a town of say, 500, will rapidly alter the local economy. Simply, if the supply of cash is high while the supply of consumables and gear diminishes, exorbitant prices for even the most mundane of items will become the norm.

All that stated, then, it should be obvious that the influx of coin-drenched adventurers into any economy is likely to have startling consequences. But the real focus of this piece is on money, or, more generically, the medium of economic exchange found throughout the campaign.

Coinage and Cowry Shells

Minted coins are by far the most obvious medium of exchange, but it is not likely that they exist in great quantities in any kingdom or realm of the average fantasy campaign. Coins, composed of rare and precious metals, must be minted, and this presents questions and problems of its own.

The first of such difficulties is rationalising the use of precious metals for such purposes. In the quasi-mediaeval worlds of most fantasy campaigns, such metals are better used as adornments, jewellery, religious symbols, altar trappings, or lumps of portable wealth ready to be smelted into something valuable. Minting coinage is an elaborate and expensive enterprise in itself. The general concept of minting coins is to equate the value of the coin to the weight and volume of the precious metal it’s made of. Even so, once the coins are minted, they must be released carefully into the local coffers so as not to promote inflation; those coins minted but not distributed must be guarded, necessitating further expense.

Further, coins are easily lost, stolen, and counterfeited. Due to the wear of exchange, precious coin metals might be mixed with lesser metals to improve a coin’s durability, thus lowering the actual value of the medium. Coins of pure metal can also be shaved, thereby decreasing their weight, which literally compromises their actual worth. Lastly, coins minted in one realm are not likely to be accepted in other kingdoms, so their value is effectively limited to specific geographic areas.

To combat these ills, merchants often weigh coins rather than simply accept a quantity of coins at their face value. Similarly, moneychangers almost always devalue foreign currency in an effort to limit the buying power of non-native cash (as well as to line their own coffers; to the cosmopolitan moneychanger, there’s always a market for foreign coins). Some foreign coinage might also be melted down to be minted anew as local currency, courting again the possibility of inflating the regional economy.

Still, hard money is a satisfactory mode of exchange: It is easy to carry, simple to evaluate, and generally consistent in terms of worth. Alternatives to coinage do exist.

Some civilisations promote other valuables as the means of commerce; in general, anything not easily obtainable or simply rare might be worth more than its weight in silver or even gold coinage. The basic economic laws of supply and demand always prevail in any financial institution. Certainly barter should be considered a viable mode of trade—if the supply of steel is low, a sword might be exchanged for a good riding horse; a chain shirt guarantees a month’s lodging at a local inn. Gems, articles of jewellery, and art objects are other mediums to be considered, though their actual value is notoriously subjective.

Still other societies ascribe value to objects seemingly common to outsiders. A seaport might have an above average supply of coins (both foreign and domestic), as well as a prevalence of trade commodities, but they might also enact exchange with particularly rare seashells. While seemingly absurd, this fact does have an historical precedent in our own world. As civilisations matured and began to abandon barter as an economic medium, “money was used more and more for ordinary trade and tended to consist of metals, although cowrie [sic.] shells were used for a long time in Africa.”¹The 1997 Grolier Multimedia Encyclopedia. Vers. 9.00M. Computer software. Grolier Interactive, Inc., 1997. Windows 95, CD-ROM.

Fantasy Dollars

In a fantasy realm, many other objects might be used in a similar manner—amber nuggets (worth more if an insect is encased within), natural lodestone, chips of obsidian, fragments of coral, et. al. The only requirement for money is that it is valuable to the recipient, and, while a handful of seashells may not appear to be of worth to the worldly adventurer, it can certainly be of value if the local economy accepts nothing else as a medium of exchange.

As civilisations advance and become richer, they tend to consolidate their wealth in more portable forms, each of which typically represents higher denominations of actual currency. In our own world, paper money is the most common example, and was introduced in 11th-century China²The 1997 Grolier Multimedia Encyclopedia. Vers. 9.00M. Computer software. Grolier Interactive, Inc., 1997. Windows 95, CD-ROM. as a more convenient alternative to lugging about bulky satchels of coinage or heavy ingots. These paper notes were printed in representative denominations and could be exchanged for a quantity of “hard” money equal to its face value (unlike, for example, the fiat money that U.S. currency represents today).

The danger of paper money is that it can be printed easily, and this can lead to inequities between the total denominative value of a nation’s paper currency and its actual supply of hard money. If the supply of paper money outgrows its material foundation, inflation occurs as currency notes are simply offered and accepted at face value only, with little thought (or incentive) given toward their conversion to actual worth.

To combat this problem, some realms might store their wealth in the form of trade bars or ingots of precious metal. In mediaeval economies, this is a viable and approximately realistic development, as each trade bar is equated to a standard economic value. In simple terms, if 50 silver coins are required to forge one silver ingot, then each bar is worth 50 silver pieces.

If a kingdom stores its hoard of gold in the form of forged goldbricks, it can guard, store, move, and evaluate its wealth more easily and accurately than with piles of loose coinage of equal value. As an added benefit, this gold can be minted into coins at any time desired. Conversely, overly worn or shaved coins can be bought back by the government (at a discount, of course), melted down, and then converted into more ingots or re-distributed as coins, thus stabilising the local economy to an accurate level.

It is this latter mode of exchange that is likely to fill the treasure boxes of nations in the quasi-mediaeval worlds of fantasy campaigns. Certainly such will be more common than heaping mounds of coinage or sacks of paper money (which, historically, did not come into use until 1000 AD, and even then only in a remote, though advanced, culture).

A Fantasy Example

Still and all, coins represent the most common form of wealth grasped by the general population and adventurers at large. After all, few adventurers have access to a crate full of silver trade bars, nor would they wish to tote it about if they did. To maintain some consistency within campaigns, and to provide a guideline, choose a medium of exchange upon which the campaign economy is based. Gold is commonly used in high fantasy settings; silver in more gritty environs. Either is fine, though there should be coins of lesser and greater value. For example:

A copper piece (cp) is the lowest form of coinage available, and ten such coins equal one silver piece (sp). Silver, in turn, gives way to gold, and 10sp equal a single gold coin. Ten of these latter coins equal one platinum piece (pp). For simplicity, assume that each coin weighs roughly 1/250 of a pound. To convert coinage, the following formula is used:

100 cp = 10 sp = 1 gp = 1/10 pp

It is perhaps easiest to imagine these rates by equating a single gold piece to an American dollar. If so, then a copper piece is roughly equal to one cent ($0.01), a silver equals a dime ($0.10), and a platinum piece is a ten dollar bill ($10). It’s a simple system, but easy to remember, and it has the added benefit of giving players some sense of their money’s worth.

Coins are not known simply as silver or gold pieces within the various realms of the campaign; instead, it is likely that each denomination has a unique name. Thus, a kingdom might mint copper bits, silver spurs, gold crowns, and platinum sceptres. Further, not all coins are circular in shape. Some may be triangular, square, or cylindrical. A silver spur be in the shape of a five-pointed star such that each point may be broken off to equal one copper bit, with remaining “hub” of the coin equalling five bits. Other coins might have holes borne through their middle, so that they can be easily strung on chains or necklaces, or even wooden rods. In addition, some realms might mint coinage of other denominations. Depending on the relative worths of various metals, a bronze bridle might be worth five bits (i.e., $0.05), or an electrum stirrup could be minted to equal five silvers (i.e., $0.50).

One tip that’s useful for keeping character cash stores manageable is to use a low-value coin as the campaign standard, but keep all prices in your rulebook as-is. For example, a long sword in The Chimera Core Rules costs $30 (or, given the example above, 30gp). However, if the campaign runs on the silver standard, the sword now costs 300sp, or ten times the amount of coinage. The sword is still the same price, but because the campaign runs on the silver standard, gold coins will be rare, and will take more time (or a rich find) for characters to scrape up enough cash to make the purchase. As a by-product, your campaign will have a more realistic feel, as weapons and armour and equipment rocket upward in value and become prohibitively expensive for the bulk of the population.

Cash and Collateral

The above is granted on the assumption that characters have access to cash within the local economy. As adventurers, however, this is not always true. Indeed, it is to be expected that, at some point, PCs will inquire about or attempt to gain credit.

In mediaeval fantasy economies, instituted banks are rare; none are insured. Instead, moneylenders and their guilds are charged with distributing cash to the population at large and adventurers in particular, and risk is paramount in determining a borrower’s ability to repay a loan. So, to borrow money, characters must seek out the services of a moneylender. Such individuals tend to lend money at a rate of five to ten percent interest, although actual rates may be higher in some realms (and particularly when the borrower is a foreigner of a certain nationality. . .).

Interest rates are often annual, but may be monthly for high amounts (or for adventurers, who are known by moneylenders to have short life-spans). Creditors demand collateral for large loans–perhaps a piece of jewellery, a family hierloom, or a magic item before granting the loan. In all cases, the object of collateral must be at least 100% of the value of the loan.

The question of the collateral’s worth does come into question: If the collateral is worth 100% of the loan, why then does the character need to take out the loan in the first place? First and foremost, it should be assumed that the character is in need of cold, hard, cash, and that he is unable (or unwilling) to sell the object of collateral for an amount to his liking. Second, objects of collateral are sometimes (often, in actuality) worth more than their monetary value to a PC. While an enchanted ring may be worth 1,000gp, it is worth more to the character as an enchanted ring than as a pile of gold coins. After all, if the adventurer defaults on the loan, he loses the collateral to the loaning institution (and is also likely to earn a reputation as an inveterate debtor, not to be trusted by any, and certainly worth a few gold coins as a bounty for collection agents. . .). Finally, tying up a highly valuable piece of collateral promotes the complete and timely repayment of the loan.

Interest rates higher than 10% are rarely imposed, unless the loan is secured from an underworld figure or if the loan repayment is of the utmost importance (where a high interest rate acts more as an incentive to pay off the loan quickly than as a means to extract further monies from the PC). In parts of 16th-century Europe, the practice of usury—charging interest at an exorbitant rate—was illegal. But fantasy realms are sure to have their share of Shylocks, and these greedy lenders do their utmost to extract whatever gain they can from characters in need of credit.

Starting Assets

With all that stated, there is the question of how much money is possessed by a character at the start of play. In many game systems, this is a facet of profession—characters of a particular class gain a specific amount of money upon generation. In the end, a PC’s quantity of starting money is best left to his background details and the dictates of the GM.

In simple terms, characters rising from particularly wealthy surroundings possess larger amounts of available cash than those starting from lowly or impoverished (or barbaric) backgrounds. How the GM interprets these extremes is difficult to set down in black and white. Some games have introduced tables to determine a character’s social class or standing, but these tend to fail in light of one’s cultural background: how can one justify a barbarian of “upper middle class” within an essentially classless society? On the other extreme, how can a character of base birth be justified if he lives within a society of thriving commerce—and still be able to claim the background skills and abilities of his class without the financial obligation requisite to his background training? In other words, can a fledgling character, born an urchin in the streets of a rich city, hope to gain the powers and abilities of a warrior or sorcerer without special fiduciary benefit?

Thus, social ratings based on class must be abandoned as random constructs of a die roll. Instead, starting cash must be determined as a result of one’s actual culture and society (and, in game terms, the acquisition of the Wealth trait or Poor flaw). After all, there are rich mannish societies and poor mannish societies. Elves dwelling in the wilderness have little use for money, though dwarves hoard it. Halflings thrive on trade, but orcs do nothing but plunder wealth where they find it. Ogres have a similar bent, but centaurs use wealth only in trading for goods they cannot otherwise produce. And on and on…a society’s recognition of wealth is notably subjective.

Conclusion

The economic media of fantasy campaigns vary from kingdom to kingdom, but the GM must take careful steps to ensure that the mode of exchange is both consistent and realistic within the context of each realm. Whether coins, ingots, paper, trade goods, or seashells are favoured, economies are the lifeline of any civilisation, and the laws of supply and demand always hold sway—with or without, or as a result of, the actions of adventures. By keeping these details in mind, the details of commerce within the milieu will be made far richer overall.